Short answers, pulled from the story.
Vatnsdalur is a glacial trough valley situated in the Húnabyggð municipality of Northwestern Region, Iceland. It lies south of Blönduós and southeast of the Hóp tidal lagoon with the Húnaflói bay less than 15 kilometers to the south-southeast.
Flóðið lake formed after the Bjarni rockslide occurred on the 8th of October 1720 when Skree and debris from Vatnsdalsfjall mountain dammed the river. This landslide submerged three small ponds known as Þríhyrningur, Mýrar, and Lón to create the current flood waters.
Ingimundr the Old Thorsteinsson appears as the principal character in the Vatnsdæla saga who received a silver amulet dedicated to Freyr from King Harald Fairhair. He chose to settle in Vatnsdalur because the greenery of the valley attracted him deeply after emigrating from Norway.
The final execution in Iceland occurred on the 12th of January 1830 at three hills called Þrístapar within the northernmost reach of the valley. Friðrik Sigurðsson and Agnes Magnúsdóttir were beheaded for murdering Natan Ketilsson and Pétur Jónsson on the 14th of March 1828.